When Chris Newlove Horton lost his mobile phone during a Saturday night out, he gave little thought, as he looked around the pub the following day, of the potentially catastrophic effect on his finances.

Convinced it would turn up, and reassured that the handset was pin protected, he didn't report its loss to his phone company, Orange (or EE as it is now known), until the following Thursday.

But now Newlove Horton, a relatively low-paid NHS worker, is being chased by EE's debt collectors for £4,107. It turns out that the phone was stolen and used to make calls to Algeria almost round the clock. Despite the fact he had never called the north African country before, EE was happy to let his bill rise to more than £3,400 in the space of a few days, and is holding him entirely responsible for the calls.

On the advice of an EE call centre worker he cancelled his direct debit, but is now receiving threatening letters from Moorcroft Debt Recovery demanding more than £4,000, including an unexplained extra £700. "It is a god-awfully large amount of money. I am so angry with them," says Newlove Horton, who has been a customer for nine years. All his attempts to negotiate a settlement have fallen on deaf ears.

Along with millions of other mobile users, he was unaware his contract made him liable for every call until the handset was reported missing – irrespective of the size of the bill. He says he has no prospect of repaying the money, and Citizens Advice has suggested he look at a debt relief order – a cheaper and easier form of bankruptcy.

However, a deal announced this week by ministers might come in time to help Newlove Horton and others in the same circumstances.

Following a long campaign by Guardian Money (we first wrote about this issue more than a decade ago), the government is finally tackling the problem. After years of discussions between the mobile providers and the regulator Ofcom – and just days after Labour said it would introduce the same measure – culture secretary Maria Miller told journalists in Beijing this week that a deal had been struck to introduce a bank card-style limit to a consumer's liability – possibly as low as £50.

An agreement with EE, Three, Virgin Media and Vodafone (O2 was noticeably absent) had been done, she said, and a cap would follow. "Government, Ofcom and the mobile operators will undertake detailed work to determine the level of the cap and the conditions that will apply to it with the ambition of introducing it in spring 2014," says the formal agreement, since published by Miller's department.

Despite the promise, mobile phone insiders are already questioning whether it will be ready that soon. The providers have been desperate to avoid a cap and fought off the regulator's half-hearted attempts to introduce one in the past. Guardian Money understands that the exact terms – the size of a liability cap and whether it should be linked to a time limit – are undecided and being hurriedly looked at.

In March 2012 the regulator gave the mobile phone companies until the summer to come up with plans to introduce caps on their customers' monthly bills. At the time Ofcom threatened enforcement action if they failed to do so, but the deadline passed without any action.

An Ofcom spokeswoman said the regulator would fully support the new process. "We take the issue of bill shock extremely seriously and have expressed particular concerns about the unlimited liability that consumers can face in the event of unauthorised use of a lost or stolen phone."

Sadly, any action will come too late for the countless consumers who were threatened with bankruptcy by mobile providers after they failed to report the theft of their phone.

Back in 2003, we reported on the case of Ben Jemison who was landed with a £1,000 bill when his mobile was stolen in Barcelona. Since then cases have come in thick and fast, and we could have run a similar story every month – if not more.

Also in 2008, Three threatened trainee doctor Michael Barker with debt collectors after thieves ran up a £1,500 bill. He had been working as a volunteer at a hospital in an Aids-devastated area of Africa when his sim card was taken from his rucksack. The thieves racked up the charge despite a £75 credit limit on his account. Another victim was Vodafone customer Kaveh Lajmir who was hammered with an £8,000 bill in 2012 after thieves struck while he was on holiday in Barcelona.

But it isn't only phones taken abroad. In 2010, Money helped a woman who had left her phone in a locked drawer at work. Orange hit her with a £1,200 bill for constant calls to the Caribbean, even though she had never before made a call abroad. In most cases the phone companies halved the bill when pressured, but this still left many users with unaffordable bills.

Those customers who took their complaint to the telecoms ombudsmen lost because it had no power to intervene in contractual disputes. Money has advised readers to go to court and argue that the phone company failed in its duty – but that will hopefully no longer be necessary.

In Newlove Horton's case, EE says it continues to hold him responsible for the entire bill, although it will offer him repayment terms.

"We strongly advise customers to treat their phone as they would their wallet. If it has been lost or stolen it is very important we are informed as soon as possible, as it is only then we can prevent calls or data use being charged to the account. In this instance the customer waited six days to inform us the phone had been lost," it said.